Excessive dependence of KAMAZ on the state disappointed Moody's

Rating of the auto giant has been lowered to B1 with a negative outlook on the background of the extension of part-time work.
The rating agency Moody's Investors Service has revised the ratings on the eve of PJSC "KAMAZ". Corporate rating company was downgraded to B1 from Ba3, outlook "negative." In this step the agency went primarily due to the reduction of the company's creditworthiness. What more international experts was charged Chelninsky automaker, versed "Business Online».


The latest news from the auto giant Chelny can not be called optimistic. Today, "Vedomosti" reported that KAMAZ has extended for six months part-time mode, in which the company has lived for two years. On the eve of Moody's Investors Service rating agency has downgraded the rating of PJSC "KAMAZ". Corporate rating Chelny automobile was lowered to B1 from Ba3, outlook "negative." Translated into simple language, the KAMAZ bonds that and so were "non-investment grade" (speculative), were "highly speculative", that is, for as long as the critical level, they are not moved.

Recall that in March 2015 Moody's downgraded the rating of KAMAZ also one notch from Ba2 to Ba3.On March 10 this year, the agency has to review the 13 Russian companies, including KAMAZ.

The experts base their decision to the agency? The first decline in the creditworthiness of the auto giant, due to the deterioration of the situation on the truck market - it sank 42% in 2015 after falling by 25% in 2014. Recall that in volume terms sales leader in the Russian market sank by 30.5% last year to 22.6 thousand. Machines. The company noted that the total market size truck gross weight of 14 - 40 tons amounted to 38.7 thousand units, uzhavshis by 45.1% compared with the previous year.. The share of KAMAZ for the year reached 57.6% against 45.6% in this segment in 2014. To learn how to market shrank trucks in 2012 - 2015 years, we have been told.

Last year the company's revenue decreased by 17% to 86.7 billion. Rubles, and net loss increased 7.8 times to 3.3 bln. Rubles. This is the worst result for the last 6 years. Prior to that, a net loss of 6.9 billion rubles KAMAZ -. However, as a group of companies - received in 2009. For reference: the first three quarters KAMAZ was in the red at 2 billion and its revenues.It amounted to 52.7 billion. rubles. In general, for the fourth quarter chelnintsev it turned out, to put it mildly, controversial: they significantly increased their turnover, but the company's losses in comparison with the first 9 months of 2015 soared by more than half.


In addition, a press release from the agency stated that the cash flows KAMAZ weakened (apparently based on hard currency) due to the depreciation of the ruble in 2014 - 2015. On the other hand, it has led to higher prices for the individual components, which are denominated in foreign currency. As a result, the company has focused on the efforts of passing increased costs to consumers.

We are in their reviews have already noted that the weak ruble is only at first glance gave trumps in the hands of Automaster Chelny, becoming a natural obstacle for Chinese imports and help to replace some European models. In the end, everything turned out differently. Because of the need to buy imported equipment, in particular, the same line for painting booths, significantly risen and KAMAZ investment program is estimated at $ 3 billion. As told in Marchthose he Sergei Kogoghin, "weighing" 95 billion. rubles modernization plans now crossed "far beyond the 200 billion rubles."

In addition, it was necessary to pay more for imported parts for the same brand-new tractors. The fact that during this time happened to domestic demand, which is crucial for KAMAZ, once again reminded we will not.


The agency also notes the placement of two issues of bonds with state guarantees for 5 billion. Rubles each in August and December 2015.

We pointed out that interest payments paid KAMAZ increased by 935 million. Rubles to 2.4 bln. Rubles in 2015. However, part of the "overrun" was covered by an increase in interest income to 401 million. Rubles. Of course, we had good reason for the growth of loan servicing costs. The credit portfolio of KAMAZ for 12 months increased by 13.3 bln. Rubles to 38.5 billion. Rubles as of December 31, 2015. The company attracted Sberbank credit line, PSB, AB "Russia", AKIBANK bank "Zenith", Zapsibkombank and VTB.

In addition, Dr. chelnintsy last yearzmestili bonds by a total of 15 billion. rubles, including, as we have said, 10 billion. with state guarantees. As a part of short-term debt of the company as reflected bearer bonds series BO-5 to 2 billion. Rubles. And as long-term - debt to the Ministry of Finance of the Russian Federation on the international agreement on December 7, 2005 with a maturity of December 29, 2034. And in December 2015, the parties entered into a supplementary agreement, which provides for the performance of obligations denominated in Japanese yen, the Russian currency at a fixed exchange rate of the Japanese yen against the Russian ruble. What facilitated the old "Japanese debt" once by 40%.

Moody's experts emphasize that the government is ready to guarantee bonds totaling 35 billion rubles, and KAMAZ completely choose this limit in 2016 -. 2017 years. The agency did not doubt that it is guaranteed by the state and provided by the state will prevail loans in the loan portfolio of KAMAZ. Analysts explain that the negative outlook reflects the pressurized KAMAZ quality as a borrower and a negative outlook on Suvernnomu rating Russia. The Agency believes that further deterioration of the business environment and the compression of the Russian truck market will lead to a weakening of KAMAZ indicators.

The strength and weakness - in state support

What else can degrade the rating of KAMAZ? The Moody's report said that it will be reduced in the case of reduction of the sovereign rating of the Russian Federation; if the truck market will not recover or if the government suddenly limit the unprecedented support of the enterprise.

The first option is quite possible with the deterioration of the situation in the oil market and unsuccessful action in economic policy. The second is closely related to the first, as the worsening of the market environment will be reduced investment, and hence the demand for trucks. But in the third embodiment of analysts assumptions stumble upon the promise of President Vladimir Putin, who guaranteed the support of the company, despite all the difficulties in the economy.

In short, the main factor of strength, it is a factor of weakness - over-reliance on government support, according to Moody's. Although, according to the head of the press service of KAMAZ Oleg Aanaseva huge support of the plant - is a myth.

In conclusion, we can add that in terms of speed of KAMAZ in the first quarter of this year, it seems to have bottomed and increased revenue by quarter. However, a total of three months in a record net loss of 2.2 bln. Rubles really able to shake the faith in the creditworthiness of the company on the market conditions. And if KAMAZ will continue in the same spirit, the negative outlook Moody's may be justified.